Critical Survey: SL Green Realty Corporation (SLG) vs. Equity Commonwealth (EQC)
SL Green Realty Corporation (NYSE: SLG) and Equity Commonwealth (NYSE:EQC) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.
SL Green Realty Corporation pays an annual dividend of $3.10 per share and has a dividend yield of 3.0%. Equity Commonwealth does not pay a dividend. SL Green Realty Corporation pays out 319.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SL Green Realty Corporation has raised its dividend for 5 consecutive years.
Insider and Institutional Ownership
94.1% of Equity Commonwealth shares are held by institutional investors. 3.1% of SL Green Realty Corporation shares are held by company insiders. Comparatively, 1.0% of Equity Commonwealth shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares SL Green Realty Corporation and Equity Commonwealth’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|SL Green Realty Corporation||7.20%||1.43%||0.72%|
Volatility and Risk
SL Green Realty Corporation has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Equity Commonwealth has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for SL Green Realty Corporation and Equity Commonwealth, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|SL Green Realty Corporation||0||7||5||0||2.42|
SL Green Realty Corporation currently has a consensus price target of $115.45, indicating a potential upside of 10.60%. Equity Commonwealth has a consensus price target of $33.00, indicating a potential upside of 7.84%. Given SL Green Realty Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe SL Green Realty Corporation is more favorable than Equity Commonwealth.
Valuation and Earnings
This table compares SL Green Realty Corporation and Equity Commonwealth’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SL Green Realty Corporation||$1.53 billion||6.75||$871.44 million||$0.97||107.62|
|Equity Commonwealth||$409.33 million||9.28||$194.30 million||$0.86||35.58|
SL Green Realty Corporation has higher revenue and earnings than Equity Commonwealth. Equity Commonwealth is trading at a lower price-to-earnings ratio than SL Green Realty Corporation, indicating that it is currently the more affordable of the two stocks.
SL Green Realty Corporation beats Equity Commonwealth on 10 of the 17 factors compared between the two stocks.
SL Green Realty Corporation Company Profile
SL Green Realty Corp. is a self-managed real estate investment trust (REIT), with in-house capabilities in property management, acquisitions and dispositions, financing, development and redevelopment, construction and leasing. The Company operates through two segments: real estate, and debt and preferred equity investments. It acquires, owns, repositions, manages and leases commercial office, retail and multifamily properties in the New York Metropolitan area. Its debt and preferred equity activities include purchases and originations, inclusive of advances under future funding obligations, discount and fee amortization, and paid-in-kind interest. As of December 31, 2016, the Company owned or held interests in 24 consolidated commercial office buildings encompassing approximately 16.1 million rentable square feet and seven unconsolidated commercial office buildings encompassing approximately 6.6 million rentable square feet located primarily in midtown Manhattan.
Equity Commonwealth Company Profile
Equity Commonwealth is an internally managed and self-advised real estate investment trust. The Company is engaged in the ownership and operation primarily of office buildings across the United States. The Company conducts its activities primarily through EQC Operating Trust (the Operating Trust). As of August 14, 2017, the Company’s portfolio included 20 properties and 11 million square feet. As of December 31, 2016, its properties included Parkshore Plaza; 1225 Seventeenth Street; 1601 Dry Creek Drive; 97 Newberry Road; 33 Stiles Lane; 802 Delaware Avenue; 6600 North Military Trail; East Eisenhower Parkway; 2250 Pilot Knob Road; 411 Farwell Avenue; Cherrington Corporate Center; 1500 Market Street; Foster Plaza; 4515 Seton Center Parkway; Bridgepoint Square, and Research Park. As of December 31, 2016, the Company’s land parcels included 625 Crane Street and Cabot Business Park Land.
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